Question:
If all the forfeited shares are reissued, the balance, if any, left in the Forfeited Shares Account is transferred to:
If all the forfeited shares are reissued, the balance, if any, left in the Forfeited Shares Account is transferred to:
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Remember that the Capital Reserve Account is used to record capital profits, such as surplus from forfeited shares after reissue.
Updated On: Jan 29, 2025
- General Reserve Account
- Securities Premium Account
- Capital Reserve Account
- Statement of Profit and Loss
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The Correct Option is C
Solution and Explanation
When forfeited shares are reissued, any balance left in the Forfeited Shares Account is treated as a capital profit and transferred to the Capital Reserve Account. This is as per standard accounting practices.
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